The Minister in the Dominican Republic (Scotten) to the Secretary of State
[Received 7:35 p.m.]
139. From Wilson. At a meeting this morning with the negotiators referred to in the Legation’s telegram No. 138, August 21, 10 a.m.,9 Despradel10 presented draft proposal. I am repeating the text of the body but not of the preamble. I reserved comments pending necessary study. Comments on text will follow in separate telegram. Text follows:
“Article 1. The Government of the United States of America and the Government of the Dominican Republic agree to abrogate the convention entered into between them both on December 27, 1924 in order to substitute for the said convention the provisions which are established in this agreement.
Article 2. On the date on which this agreement enters into force the Dominican Republic will take charge of the collection of the customs revenues of the Republic through its corresponding national officials, of all the revenues derived from customs duties, and therefore the general receivership of Dominican customs will be closed as from this same date.
Article 3. The Government of the United States of America and [Page 803] the Government of the Dominican Republic in common accord will designate a bank with an establishment in the Dominican Republic, as depository of the general funds of the Dominican Government and agrees to designate, also by common accord, an official who would act in the said bank to represent the Foreign Bondholders Protective Council, Incorporated, in all that concerns the service of the Dominican external debt.
During the first days of each calendar month the official thus designated will receive by endorsement and by means of orders of payment which will be given to the bank by the Dominican Republic through the intermediary of the Secretary of State of [for] the Treasury and Commerce, the sum necessary for the monthly service of the external debt, which should be applied by the same representative in the following manner:
First, to the payment of the services of the depository bank in accordance with what may be agreed upon between the bank and the Dominican Government and to the payment for the services rendered by the representative of the Foreign Bondholders Protective Council in connection with the service of the public debt, it being understood that said payments may in no case exceed three fourths of one per cent monthly of the revenues deposited.
Second, to the payment of the interest of all the outstanding bonds.
Third, to the payment of the annual sums designated for the amortization of the said bonds, including the interest of all the bonds which are retained in the sinking fund, which will be effected in accordance with the agreement concluded between the Dominican Republic and the Foreign Bondholders Protective Council, Incorporated, August 16, 1934.
Article 4. The Government of the Dominican Republic promises not to dispose of the funds which will be deposited each month in the said bank until the Secretary of State, of [for] the Treasury and Commerce has ordered the payment to the order of the representative of the Foreign Bondholders Protective Council, Incorporated, of the sum necessary for the corresponding monthly service of the foreign debt.
Article 5. The system of deposit of all the revenues of the Dominican Republic will be carried out in conformity with the laws of accounting and of the Treasury now governing such matters and these laws as well as the powers which the tenor of this accord confers upon the representative of the Foreign Bondholders Protective Council, Incorporated, may not be modified or diminished by the Dominican Government during the life of this agreement without the previous consent of both Governments.
Article 6. The present agreement will enter into effect after having been ratified by the contracting parties in conformity with their respective constitutional methods and will continue in full force and effect during the existence of the outstanding external bonds, it being understood that after payment or cancellation of the bonds issued by the Dominican Government and included in the conventions of 1907 and 1924, the provisions of this agreement shall be considered automatically null and void.[Page 804]
Article 7. The exchange of ratifications of this agreement will be effected in the City of Washington, District of Columbia the first day of the month immediately following the last ratification by either of the two countries and from that date the convention signed by the Dominican Government and the United States of America on December 27, 1924 will cease to have effect provided, however, that article I to V inclusive of the said convention of December 27, 1924 shall continue in full force and effect until there have been adopted and executed all the necessary requirements in order that the present agreement may enter into effect.
In testimony whereof the plenipotentiaries will sign and seal this convention in duplicate, in English and Spanish, both texts being authentic.
Done in the City of Washington, District of Columbia, the . . . . . day of . . . . . . ., 19 . .”